OP (OP) tokenomika

The token economics of Optimism's native asset, OP, are designed to create a self-reinforcing economic mechanism, often referred to as a "flywheel," that funds public goods and incentivizes ecosystem growth. The system is governed by the Optimism Collective, a bicameral structure consisting of the Token House and the Citizens’ House.

Issuance Mechanism

The OP token is an ERC-20 equivalent token that began circulating on May 31, 2022, with an initial total supply of 4,294,967,296 OP tokens.

The token supply is not fixed; it is designed to inflate at a rate approved by the Token House governance. This mechanism allows the supply to be adjusted based on the collective's needs and decisions.

Allocation Mechanism

The initial total supply of OP tokens was distributed across five main categories, with a strong emphasis on community and ecosystem development:

The Ecosystem Fund (25.0%) is further broken down into:

• Governance Fund: 5.4%
• Partner Fund: 5.4%
• Seed Fund: 5.4%
• Reserves (Unallocated): 8.8%

Usage and Incentive Mechanism

The OP token serves two primary functions: governance and incentivization.

1. Governance

OP tokenholders form the Token House, one of the two houses of the Optimism Collective. Tokenholders must delegate their OP to themselves or an existing delegate to vote on proposals. The Token House governs network changes, including:

• Governance Fund budgets
• Network upgrades
• Inflation adjustments
• Treasury appropriations
• Optimism Foundation Director removal

2. Incentivization and the Flywheel Effect

Optimism's economic model is built around a self-sustaining "flywheel" where network revenue is reinvested into public goods, which in turn drives more demand for the network.

• Revenue Generation: Demand for OP blockspace generates revenue, primarily collected by the network's sequencer.
• Retroactive Public Goods Funding (RetroPGF): A significant portion of the initial token supply (20%) and ongoing network transaction fees/sequencer revenue are allocated to RetroPGF. This mechanism rewards community members and projects that have already provided positive impact to the ecosystem, encouraging future value creation.
• Ecosystem Fund: This fund (25% of supply) proactively incentivizes future growth through various sub-funds:
  • The Governance Fund (5.4%) regularly distributes OP to projects and communities.
  • The Partner Fund (5.4%) is strategically distributed by the Optimism Foundation.
  • The Seed Fund (5.4%) supports early-stage projects.
• Airdrops: The 19% allocation for airdrops is used to reward users who exhibit positive-sum behaviors and contribute to the community.

Locking Mechanism and Unlocking Schedule

Tokens allocated to Core Contributors (19%) and Sugar Xaddies (Investors) (17%) are subject to a lockup period followed by linear vesting.

• Initial Lockup: The tokens for Core Contributors and Investors were locked for one year after OP began circulating on May 31, 2022.
• Vesting: Following the initial one-year lockup, these allocations began a linear vesting schedule.

The overall unlocking schedule for the total supply over the first four years shows a structured release:

• Early Unlocking: The "Community: User Airdrops" portion saw a significant amount of its allocation unlocked early, between Year 0 and Year 1.
• Progressive Unlocking: The allocations for Core Contributors, Investors, and the "Community: Ecosystem Fund + RetroPGF" unlock steadily over the four-year period.
• Full Unlocking: By the end of Year 4, the total supply is projected to be fully unlocked. The largest cumulative share of the unlocked supply by Year 4 is dedicated to the community (Ecosystem Fund + RetroPGF).

Specific, granular data on recent daily unlock events for Optimism was not available.